\begin{table}[htbp]
\caption{Baseline Calibration of the Model}
\begin{tabular}{lS[table-format=2.3]l}\toprule
Parameter & \multicolumn{1}{l}{Value} & Description \\ \midrule 
$\beta$ & 0.997 & Subjective discount factor\\ 
$\psi$ & 0.175 & Weight on durable service flow\\ 
$\sigma$ & 0.5 & Utility curvature on nondurable consumption\\ 
$\sigma^d$ & 1 & Utility curvature on durable service flow\\ 
$\theta^d$ & \text{varies} & Calvo parameter on durable adjustment\\ 
$\eta$ & 0.018 & Durable operating cost\\ 
$\nu$ & 76.918 & Weight on disutility of labor\\ 
$\phi$ & 1 & Inverse of the Frisch elasticity of labor supply\\ 
$\gamma$ & \text{varies} & Fraction of Hand-to-Mouth consumers\\ 
$\vartheta$ & \text{varies} & Hand-to-Mouth MPC on durables\\ 
$\delta^d$ & 0.015 & Depreciation of durable consumption goods\\ 
$\alpha$ & 0.36 & Exponent on private capital in production function\\ 
$\delta$ & 0.005 & Depreciation of private capital\\ 
$\kappa$ & 40 & Investment adjustment cost parameter\\ 
$\delta_1$ & 0.008 & Parameter on linear term of capital utilization cost\\ 
$\delta_2$ & 0.017 & Parameter on quadratic term of capital utilization cost\\ 
$\mu_p$ & 1.2 & Steady-state price markup\\ 
$\mu_W$ & 1.2 & Steady-state wage markup\\ 
$\theta_p$ & 0.917 & Calvo parameter on price adjustment\\ 
$\theta_W$ & 0.917 & Calvo parameter on wage adjustment\\ 
$\epsilon_p$ & 6.0 & Elasticity of substitution between types of goods\\ 
$\epsilon_W$ & 6.0 & Elasticity of substitution between types of labor\\ 
$gy$ & 0.2 & Steady-state share of total govt spending to GDP\\ 
$\phi_b$ & 0.027 & Debt feedback coefficient in fiscal rule\\ 
$\rho_{r}$ & 0.947 & Monetary policy interest rate smoothing\\ 
$\phi_{\pi}$ & 1.5 & Monetary policy response to inflation\\ 
$\phi_{gap}$ & 0.083 & Monetary policy response to the output gap\\ 
\bottomrule\end{tabular}
\begin{minipage}{\hsize} \rule{0pt}{9pt} \footnotesize 
Notes: The model is calibrated at a monthly frequency. The parameter $\gamma$ is calibrated to either 0.3, 0.5, or 0.9, which corresponds to the aggregate MPC in the model. The parameter $\theta^d$ is calibrated such that for each value of $\gamma$ to model replicates our empirical targets for the short-term interest elasticity of durable demand. For example, when $\gamma=0.3$, then $\theta^d=0.85$. The parameter $\vartheta$ is calibrated  to match an overall MPC on motor vehicles of 0.3 when $\gamma=0.3$ and of 0.4 when $\gamma=0.5$ or $\gamma=0.9$. This yields  $\vartheta=1.0$ when $\gamma=0.3$,  $\vartheta=0.8$ when $\gamma=0.5$, and  $\vartheta=0.44$ when $\gamma=0.9$. See the text for details. \end{minipage}
\label{tab:calibration}
\end{table}
